Hard Soda Brands Built Business by Understanding Millennial Drinkers

The 2016 IRI Top Ten Pacesetters highlight food and beverage brands that create novel or unexpected experiences. Earning spots #3 and #10 are competitive alcoholic beverages Not Your Father’s Root Beer and Henry’s Hard Soda. These brands started strong and celebrated strong success, although more recently other beverages have stolen market share. While they both have experienced sales declines in 2017, the case study is instructive for brands seeking to reach Millennials.

IRI elaborates:

“On the food and beverage side, customization is often about creating unexpected or novel—even local or artisan—experiences. Not Your Father’s Root Beer, for instance, is a unique root beer-flavored beer.”

Not Your Father’s Root Beer sold $114.6M in its first year, with a 38% repeat buy, compared to Henry’s Hard Soda’s $50.3M and 29% repeat buy. Millennial drinkers helped fuel these pacesetters’ successes. As reported in The Tennessean:

“Millennials of legal age, though only representing one-fourth of adults over 21, account for 35 percent of U.S. beer consumption and 32 percent of spirit consumption according to Nielson. The Wine Market Council reports that they consume 42 percent of all wine in the U.S.”

Both alcoholic brands pursue market strategies that target Millennials, but focus on different segments.

Not Your Father’s Root Beer Meets the Social Needs of Non-Beer Drinkers

A craft beer brewed by Small Town Brewery in Wauconda, IL, Not Your Father’s Root Beer features a blend of spices including sarsaparilla, anise, wintergreen, and vanilla, along with a 5.9% A.B.V. In the heavily-competitive craft beer industry, Chicago Tribunereports:

“Small Town Brewery has become the nation's sixth best-selling craft beer brand in stores… It's difficult to overstate how unlikely such growth is: Based solely on the strength of one product — Not Your Father's Root Beer — Small Town Brewery trailed only Samuel Adams, Sierra Nevada, New Belgium, Shiner and Lagunitas in terms of sales through the summer. That one brand had soared past the entire portfolios of industry stalwarts like Goose Island, Stone and Bell's.”

Which is quite an impressive feat for a product that only launched in 2015. Small Town Brewery boasts a unique backstory, which is part of its appeal:

“My great-great-grandfather from the 1600s was the captain of a ship in England. He was also a bit of a gambler. As legend has it, he won a brewery during a high-stakes card game, which led him to start crafting his own beers. He began brewing beer on the ships he sailed. This allowed him to travel further than other vessels because beer stayed fresh during long journeys. The story goes that his beer was even consumed on a fleet of ships he commanded that transported some of the earliest settlers to America. Using some of my great-great-grandfather’s recipes as inspiration, I founded Small Town Brewery. At Small Town, our goal is to honor my family’s beer making tradition by creating specialty beers with unique and flavorful ingredients.”

The secret to Not Your Father’s Root Beer is that it has a bona-fide craft beer background but tastes nothing like beer. It allows consumers who don’t like beer to fully participate in social events featuring craft beers, which are an especially important part of Millennials’ social life. Millennials make up a large beer-drinking segment, and they prefer craft beers to other beer. According to the Brewers Association, they make up 57% of weekly craft beer drinkers.

“I'm not a huge beer drinker, and I have a reputation for drinking beers so slowly they get warm, I know it's just terrible. But I just discovered ‘Not your father's root beer’ on accident when I was at a CVS and I'm in love!! It's SO yummy!”

“My all time favorite ‘beer!’ The Not Your Father's and Not Your Mother's brands are so good. These are all I drink anymore! For anyone who doesn't like beer but still likes to have a bottle to sip on for events, this is your go to!”

It appears that the target includes consumers whose taste preferences are not aligned with normal craft beer flavors and, with these user comments, the target usage occasion for this product appears to be in more social craft beer/beer drinking occasions. While not explicitly stated, my experience suggests that there are also some heavier craft beer drinkers among its consumers who will use this product for variety and/or to share with others who dislike ‘typical’ beer taste profiles.

Henry’s Hard Soda Appeals to Parents and Other ‘Adults’

Henry’s Hard Soda is a malt beverage with natural flavors and cane sugar, which speaks to the food trend of clean labels. Parent company MillerCoors reports it is the number one hard soda brand.

With a 4.2% alcohol volume, Henry’s slogan is to “Live Hard-ish.” Its upbeat positioning appeals to older Millennials and Gen-Xers who “have stuff to do tomorrow,” and features videos like “Laundry Hard-ish” or “Date Night Hard-ish.”

These marketing executions clearly include the target of parents of young children (who do seem to be drinking more these days).

“Henry’s Hard Sparkling is perfect for those looking to treat themselves, lightly. Whether it’s following a group spin-class or during a post-softball game toast with friends, Henry’s Hard Sparkling offers everyone the option for a lighter celebration.”

The occasions depicted by Henry’s are often solitary or small social gatherings (date night, friends with cards), and the appeal is more to liking the taste, than it is to fitting in by drinking a beer-like product.

It’s very interesting that two hard soda brands with distinct positionings earned spots in IRI’s Top Ten 2016 Pacesetters. While their parents may have sipped Seagram’s wine coolers and Bud Lights, Millennials and Gen-Xers enjoy the taste, nostalgia and buzz of trendier hard sodas, along with other beverages.

Thanks for suggesting it Ned!
Info we have shows Not Your Father's hit a peak though August 2016 when it made IRI Pacesetters, but has declined significantly through August 2017. In contrast, Henry's has been more stable at a lower level of sales, with only modest declines in 2017. Case studies remain interesting but also show a bit of faddishness on the part of these consumer targets.